Viveracqua Hydrobond – When Infrastructure Investments Meet Securitization Harvard Case Solution & Analysis

On 29 July 2014, eight companies belonged to the Vivearacqua Consortium (an ensemble of water utilities mainly running in Veneto, among the most industrialized area of Italy). This trade is the very first time Italian Small and Medium-sized Enterprises (SMEs) ever reached the capital markets through securitization without help from a bank acting as an intermediary. In a span of issue for the market of Italy, this new technique represents a chance to unlock a fresh route of financing for SMEs.

This could possibly decrease their reliance on a banking sector which is still deleveraging in the face of more stringent capital requirements demanded by regulators in the aftermath of the fiscal disaster issued on a cross-collateralized basis €150 million worth of mini-bonds (Stage 1, Section 2). These securities were fully subscribed by the recently-created special purpose securitization vehicle (SPV) called Viveracqua Hydrobond 1. The structuring process took nine months to finish and was co-organized by FinanziariaInternazionale Securitisation Group S.p.A. (Finint) and the fiscal arm of Veneto area, Veneto Sviluppo.

Revised Date: 03/04/2016

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